Despite signs of slowing, sales of existing single-family
homes in Greater Hartford rose in 2004, compared with the previous year, remaining
far more robust than most economists had expected.

In 2004, closed sales in the 57-town area increased 4.5 percent, to 11,704, compared
with 11,201 in 2003, according to the Greater Hartford Association of Realtors.
Sales prices also continued to climb, with the median price surging 10.2 percent,
to $227,000, up from $206,000 the previous year.

Last year also was capped by a strong showing for December, which is typically
slower because of the holiday season and winter weather. Deposits rose 9.3 percent,
to 684, compared with the same month in 2003, which experts say bodes well for
sales in the first few months of this year.

"It was an excellent year for them," said Ronald F. Van Winkle, a West Hartford
economist. "And December's numbers were pretty strong."

Even so, there were signs throughout 2004 that the area's hot housing market
was beginning to slow. The number of homes on the market increased for three
straight months, beginning in May. And starting in July, closed sales fell for
four months in a row.

But sales prices continued to increase, sometimes at a double-digit pace.

Claudette Alaimo, an Enfield real estate agent and a former chairman of the realtors'
association, said sales remain "steady," though not at "the hectic pace of a
year, year-and-a-half ago."

"Homes are staying on the market longer," Alaimo said. "Multiple offers have
pretty much gone by the wayside."

Although Alaimo said she expects the housing market to remain healthy this year,
rising mortgage rates would clearly slow sales.

At least some of the area's home-buying in 2004 was driven by anticipation that
mortgage rates would rise well above the historic lows of recent years - a development
that did not occur.

Mortgage rates rise in an economic recovery. But the strength of the current
expansion - nationally and in Connecticut - was repeatedly called into question
throughout 2004, particularly amid lackluster job growth.

Higher mortgage rates make it tougher to afford the starter home or a larger,
more expensive house. That dampens sales, and can slow price appreciation because
there is less competition for homes offered for sale.

Van Winkle and other economists still expect borrowing rates to rise. Freddie
Mac, the mortgage-buying agency, predicts that 30-year, fixed-rate home loans
will average 6.25 percent this year, with a likely range of 6.0 to 6.5 percent.

"It's not a question of `if,' but `when,' Van Winkle said.

No one expects housing prices in Greater Hartford to drop the way they did in
the early 1990s, when the market was flooded with new construction and demand
couldn't keep up.

But instead of annual increases of 15 percent, as some towns experienced the
past few years, prices might instead rise 5 or 7 percent a year, some economists
and real estate agents say.

There are other factors that could lead to a slowdown, as well. Many people have
purchased homes because mortgage rates have been low so long, tapping out demand.

And job growth in Connecticut remains weak. That does not give workers the confidence
to take on bigger mortgages because they are not sure they would be able to find
new or higher-paying jobs if they lose theirs.